UK exports to EU rise as Barnier issues warning

Washington Post — As Brexit gets nearer, British firms are exporting more to the other 27 countries in the European Union.

Official figures released Friday show that seven of the top 10 destinations for British exports in 2017 were EU countries. Selling everything from cars to pharmaceuticals and gin, British firms exported some 37.7 billion pounds worth of goods to Germany in 2017, around 13 percent more than the year before. Germany accounted for 11 percent of British exports, up a tad on the year before, and second overall behind the United States.

Other EU countries in the top 10 included France, where exports spiked by nearly 30 percent in 2017, and Ireland, the only EU country to share a land border with the United Kingdom.

Overall, EU countries accounted for 48.8 percent of British goods exports2017, up from 48.2 percent the year before.

The Conservative British government has made clear that Brexit means leaving both the single market and the customs union. However, it hopes to negotiate a new free trade agreement that will prevent the return of costly customs checks and tariffs.

Michel Barnier, the EU’s chief Brexit negotiator, said Friday the transition is “not yet sealed” and that barriers to trade, such as border checks, would be inevitable if Britain opts out of the single market and the customs union. Barriers can also include everything from tariffs to legal red tape.

“The United Kingdom must accept all the rules and the conditions right until the end of the transition, and must also accept the inescapable consequences of its decision to leave the European Union,” Barnier said at the end of a week of technical talks.

Proponents of Brexit say Britain would be able to thrive even in that environment as the country could have more freedom in trade discussions with countries like China, India and even the United States.

There’s clearly room for growth in British exports to China: in 2017, Britain sold 18.2 billion pounds worth of goods there, representing only 5.3 percent of its total exports, according to the Office for National Statistics.

Even though the relative importance of EU trade is greater for Britain, Brexit proponents argue that EU countries have a lot to lose, too, if free trade is interrupted.

Germany, which is Europe’s biggest economy, is the No. 1 seller of goods to Britain — it sold 69.5 billion pounds worth of goods to Britain in 2017, or around 14.5 percent of Britain’s total imports. That’s a lot of BMWs and Volkswagen Golfs.

Brexit-backers also say the EU is a major consumer of British services, particularly in finance, and that will help the sides reach a deal.

However the Brexit process pans out — and Carney has said he expects more “twists and turns” — the British economy and the EU are inextricably linked, so both sides may be treading carefully in the months ahead.